question archive Eastern Enterprises, Inc
Eastern Enterprises, Inc
Subject:FinancePrice:2.84 Bought3
Eastern Enterprises, Inc. has an expected dividend next year of $4.10 per share, a growth rate for its dividends of 7 percent, and a required return of 12 percent. Calculate the value of a share of Eastern Enterprises, Inc.'s common stock.
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Hence, the value of a share = $82
Step-by-step explanation
Computation of the value of a share:-
Value of a share = D1 / (Required return - Growth rate)
= $4.10 / (12% - 7%)
= $4.10 / 5%
= $82
